The IRS Released ACA Form 1095-B and 1095-C Drafts for the 2024 Tax Year
The IRS has already begun preparing for the 2024 tax year by releasing draft versions of ACA Forms 1095-B and 1095-C. If you’re involved in ACA reporting for your organization, it’s crucial to start early and familiarize yourself with the updates to ensure compliance with the Affordable Care Act (ACA) requirements.
This blog provides a comprehensive overview of the purpose and significance of ACA forms, highlights key changes to the draft forms, and offers guidance on accurately reporting 1095 form requirements. Staying informed on these updates will help you navigate ACA reporting and avoid potential penalties.
IRS Draft Forms for 2024 ACA Reporting are Now Available
The IRS has released draft versions of the ACA reporting forms for the 2024 tax year by Internal Revenue Code Sections 6055 and 6056.
- Form 1095-B: This form is for providers of minimum essential coverage(MEC), including self-insured plan sponsors not classified as applicable to large employers (ALEs). Check out the draft version of Form 1095-B.
- Form 1095-C: This form is for Applicable large employers (ALEs) to report in-depth information about your employees’ health insurance coverage. Check out the draft version of Form 1095-C.
Do the New 1095 Drafts Contain Any Major Changes?
The good news is that the draft version of forms 1095-B and 1095-C released by the IRS for the 2024 tax year contains no significant changes that would affect the ACA forms filing process.
However, it’s important to note that there may be updates when the final versions are published. It’s advisable to stay informed and check for any changes as the tax year progresses.
However, there are several other changes, particularly related to affordability and ACA penalty rates, are available for the 2024 tax year.
- Modification of ACA Affordability Percentage: The ACA affordability percentage is a critical factor in determining whether an employer’s health insurance plan is considered affordable under the ACA. For the 2024 tax year, this percentage has been lowered from 9.12% to 8.39%.
- Penalty Rates under 4980H: The ACA imposes penalties on applicable large employers (ALEs) that fail to offer affordable health coverage to their full-time employees. The penalty rates for the 2024 tax year are as follows:
- Section 4980H(a) Penalty: The penalty rate under this section is $2,970 for the 2024 tax year. This is an increase from $2,880 in 2023.
- Section 4980H(b) Penalty: The penalty rate under this section is $4,460 for the 2024 tax year. This is an increase from $4,320 in 2023.
Preparing for Upcoming ACA Reporting
It’s important for your organization to review the 2024 draft versions of Forms 1095. Please note that these are draft forms and should not be used for filing. Be sure to monitor future updates regarding the release of the 2024 draft instructions for these forms. TaxBandits will share IRS updates as they become available to keep you informed.
Deadline for ACA Reporting for the 2024 Tax Year
The deadline to file Form 1095-B and 1095-C for the 2024 tax year is as follows:
- Electronic filing – March 31, 2025
- Recipient copy distribution – March 03, 2025
- Paper filing-February 28, 2025
Simplified ACA Reporting from TaxBandits!
TaxBandits, an IRS-authorized e-file service provider, offers a comprehensive, user-friendly platform designed to simplify the ACA reporting process for businesses. Our user-friendly interface and exclusive features, such as real-time error checks and data validation, enable you to securely e-file 1095-B & 1095-C and 1094 forms with the IRS.
This helps you stay compliant with ACA regulations while saving time and effort. With TaxBandits, you can ensure a smooth and efficient reporting experience while minimizing the likelihood of errors.
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